Sales Terms Every Professional Should Know


Whether you’re new to sales or a seasoned veteran, it’s good to keep up with the latest sales terms. This list can also help professionals in other departments become familiar with the language sales teams use and improve communication.

Customer Acquisition Cost

The definition of this term is self-explanatory — it is the cost of acquiring a new customer. Knowing this number helps you see the expense of scaling up your sales. If you can determine how to lower the customer acquisition cost, you can help your bottom line and increase your profits.

Your CAC should include the cost of time spent acquiring customers plus marketing expenses. Divide the total by the number of new customers you received.

Customer Relationship Management System

CRM is a software package that allows you to make your customer relationship management more efficient. It assists you with repetitive tasks and customer data through automation.

CRM tools can generate emails for new customers to automate marketing tasks. They can also help with customer tracking and sales pipeline management. They can help you track and analyze data on individual customers, giving you a window on customer behavior, retention and acquisition. Some versions are designed to work as communication tools between the sales team, customers and other company departments.

User Lifetime Value

The lifetime value is the number that represents the total value of a customer to the company. It includes the customer’s entire sales history throughout the relationship.

The lifetime value is influenced by more than just the total amount of money spent with your company. Because it’s less expensive to keep current customers than to acquire new ones, you can influence company growth by adding value to your existing customers.

Monthly Recurring Revenue

This is the amount of money customers pay for a subscription to your product or service. While this number tells you how much money comes in every month, it can also help you:

  • Track growth
  • Plan your budget
  • Motivate your team
  • Make forecasts

To avoid skewing MRR measurements, be sure to exclude revenue from trial-based customers, setup fees and add-ons that don’t happen regularly.

Net Promoter Score

If you’ve ever received a call or email asking how likely you are to recommend a company’s product or service to someone, you’re already familiar with NPS.

A net promoter score asks customers for feedback — usually on a scale from one to 10 — and the answers are tallied and divided into three categories:

  • Promoter: A customer who will go out of the way to help your company, recommend your business and leave positive reviews.
  • Passive: Someone who is not likely to promote or detract from your business.
  • Detractor: An unhappy customer who can deter others from buying from you or give a negative review.

The score is calculated by subtracting the percentage of detractors from the percentage of promoters. A positive amount means you have more promoters than detractors.

Sales Qualified Lead

Sales qualified leads are possible customers who have let you know they are ready to make a purchase. They are prepared to meet with a sales representative. SQLs are different from marketing qualified leads, prospective customers interested in your company who want more information but have not shown an interest in buying.

You can spot an SQL by looking at consumers who call you with questions, register for a webinar or revisit your online product pages.

Marketing Qualified Lead

As mentioned above, MQLs have expressed an interest in your product or service. They may spend a certain amount of time browsing your website or reading your blog. Because they have initiated contact with you, they are more likely to be receptive to a sales pitch. MQLs are considered SQLs once they express an intent to make a purchase.

Sales professionals use lots of jargon in their work. If you have a relationship with the sales department or are in the industry, keeping up with the latest terms can improve communication and foster relationships between departments.

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